Last October, the Consumer Financial Protection Bureau (CFPB) implemented new paperwork requirements. These changes are known as TRID (TILA-RESPA Integrated Disclosure). However, now that these changes have been in place for a few months, lenders find that the new closing paperwork creates delays in home loans.
New Closing Paperwork Creates Delays in Home Loans
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To combat the mountains of confusing paperwork that Buyers had to deal with previously, the CFPB consolidated some of the duplicates into two easy-to-follow forms: the Loan Estimate and the Closing Disclosure. Both forms include the terms of your loan, the projected payment you should expect (including mortgage, insurance, taxes, etc), estimated closing costs and the closing cost details. The Loan Estimate must be provided to a Buyer within three days of applying for a loan. The Closing Disclosure form with updated fee information must now be provided no later than within three days of closing. These new TRID requirements were created with the Buyer in mind. Each form clearly outlines fees and terms. That benefits you, the Buyer, by providing a complete accounting of what expenses are being incurred by your home loan and where exactly your money is going. However, the downside that lenders found is that the new closing paperwork creates delays. Unless you are coming in with an all cash offer, the 30 day escrow can be rare. In order to fill out the forms, escrow officers have to coordinate with the Buyer’s representative, the Seller’s representative, the lender, title companies, insurance companies and more. If someone along the line is late in getting back to the escrow officer, the required deadline passes. The process then has to start all over again, creating a delay in the loan process. REALTORS® and escrow officers across the country report seeing an increase of seven days on average. While it’s true that the new closing paperwork creates delays, it doesn’t mean you won’t get the Westfield home of your dreams. It means you need to be patient. If you ever have any questions about the new TRID rules or any other part of the home buying process, don’t hesitate to contact me. Scott Gleason, CRS at RE/MAX Properties Unlimited, Westfield NJ luxury home service for Home Buyers and Sellers on the Move